April 30 (Bloomberg) -- SoftBank Corp., the Japanese
wireless carrier bidding for control of Sprint Nextel Corp.,
forecast record operating income as acquisitions and new
subscribers using Apple Inc.’s iPhone stoke earnings.

Billionaire President Masayoshi Son said SoftBank doesn’t
need to raise its $20 billion Sprint offer, which he called
superior to a subsequent higher proposal by Dish Network Corp.
The Tokyo-based company’s bid is worth 21 percent more after
including break fees and costs of the rival offer, he said.

SoftBank has posted higher subscriber growth than larger
Japanese rivals in the past 12 months as it bought local
competitor eAccess Ltd. to meet bandwidth demand for
smartphones. The company targeted Overland Park, Kansas-based
Sprint to add U.S. growth and reduce its reliance on a shrinking
home market.

“SoftBank’s domestic telecommunications business has
entered a phase of stable profit growth,” Hitoshi Hayakawa, an
analyst at Credit Suisse Group AG who recommends buying the
stock, said in a report after the announcement. “Both earnings
and the share price are set to be increasingly U.S. driven.”

SoftBank rose 1.2 percent to close at 4,825 yen in Tokyo
trading before the announcement, widening its gain this year to
54 percent. Japan’s benchmark Nikkei 225 Stock Average has added
33 percent this year. Shares rose 2.4 percent to 37.85 euros in
German trading.

Operating profit, or sales minus the cost of goods sold and
administrative expenses, for SoftBank’s domestic businesses
probably will exceed 1 trillion yen ($10.2 billion) in the year
started April 1, up from 745 billion yen a year earlier, the
company said in a statement today.

‘Stable Growth’

The forecast for Japan’s No. 3 wireless operator compares
with the 914 billion-yen average of 10 analyst estimates
compiled by Bloomberg within the last 28 days. The carrier
expects an increase in operating profit even after acquiring
unprofitable Sprint, Son said.

“We aim to continue generating operating profit of more
than 1 trillion yen,” Son said. “There’s no change to the
trend that users want high-quality handsets.”

“There isn’t much concern for the company’s main
business,” said Hiroshi Yamashina, an analyst at BNP Paribas SA
in Tokyo. “Earnings will likely keep growing as smartphone
demand will likely remain strong.”

‘Better Deal’

SoftBank has more experience in wireless phone networks
than Dish, which gets most of its sales from satellite
broadcasting, with the Japanese company’s offer giving the U.S.
carrier more buying power and less debt to repay than Dish’s
$25.5 billion proposal, Son said.

“People ask me will SoftBank be increasing the price for
the offer? Why should we?” Son told reporters in Tokyo today.
“We are already providing a better deal than the Dish
proposal.”

SoftBank’s bid for Sprint includes paying $12.1 billion to
the U.S. company’s shareholders and $8 billion of new capital
for a 70 percent stake, the companies said in an Oct. 15
statement.

Son said SoftBank’s offer is worth $7.65 a share for Sprint
after including “synergies” and the time delays and costs of
the rival offer, compared with $6.31 for the Dish proposal.

SoftBank didn’t change its offer for Sprint today.

Shareholder Vote

Sprint has to pay SoftBank $600 million if it recommends a
rival offer, according to terms of the deal. The Japanese
company in October closed the purchase of $3.1 billion of
convertible bonds than can be exchanged for more than 590
million Sprint shares.

Some Sprint shareholders, including Omega Advisors Inc. and
billionaire John Paulson, said they preferred Dish’s offer.

Sprint has tentatively set June 12 as the date for a
shareholder vote on SoftBank’s offer, the U.S. wireless company
said last week.

The Japanese company is introducing IFRS, or international
financial reporting standards, from the current fiscal year as
it prepares for the Sprint acquisition. The possible impacts of
that switch from the Japanese accounting standard include
deducting commissions for handset dealers from revenue and
adopting another goodwill impairment method, the company said
April 8.

Raising the bid would make billionaire Son’s ambition to
expand into the U.S. cost more, while the company’s credit
ratings are already under review for a possible cut to junk.

Credit Ratings

Standard & Poor’s and Moody’s Investors Service Inc. have
put the Japanese company’s credit ratings under review for
possible downgrade on concern the Sprint acquisition may
undermine its financial strength. A downgrade of one step would
bring the rating to a speculative, or junk, ranking at Moody’s.

Son, Japan’s second-richest man, said in October he
targeted Sprint because it can challenge Verizon Wireless and
AT&T Inc.’s dominance of the U.S. mobile-phone industry.

The 55-year-old’s stated goal is to create the largest
mobile-services provider in the world by revenue, surpassing
Verizon, Vodafone Group Plc and China Mobile Ltd.

SoftBank earlier this year spent about 25 billion yen for a
6.4 percent stake in Gungho Online Entertainment Inc., a
developer of Internet and mobile phone games run by Taizo Son, a
younger brother of the SoftBank president, the company said
April 27.